The Dun & Bradstreet PAYDEX Score Explained

February 15, 2019

Just like a consumer’s creditworthiness hinges on a FICO score, a business’s creditworthiness is determined by a scoring system as well. One business credit score that is typically used by lenders, vendors and suppliers to judge whether a business is qualified for different financing products is the PAYDEX score.

What is the PAYDEX score?

PAYDEX® is a business credit score that’s generated by Dun and Bradstreet (D&B). Their model analyzes a business’ payment performance (i.e., if it pays its bills on time) and gives it a numerical score from 1 to 100, with 100 signifying a perfect payment history.

A business’ D&B PAYDEX score is used much like an individual’s FICO score. It helps lenders, vendors and suppliers determine whether to approve you for financing and on what terms. Typically, the better the score, the more generous the terms extended. This can save your business money and give you more time to pay for supplies or services, leveling out cash flow.

In order to establish a PAYDEX score, you’ll need a Dun & Bradstreet number, or a DUNS number.

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How is my PAYDEX score calculated?

To determine your business’s PAYDEX score, Dun & Bradstreet gathers data from the suppliers and vendors with which you do business over a rolling 12-month period. Each supplier/vendor is considered a tradeline account, and the payments you make to that supplier/vendor is considered a payment experience. According to Dun & Bradstreet, two tradelines with at least three credit experiences are needed for a PAYDEX score; however, in Nav’s experience, business owners need at least three tradelines reported to create a score.

Dun & Bradstreet analyzes the promptness of your payments against the terms of sale for each payment experience. So, the faster you pay your bills, the better your score.

PAYDEX scoring is dollar-weighted, which means that each payment experience is weighted in terms of the number of transactions and the overall dollar value of those transactions. That means your transactions with your IT vendor, with whom you spend thousands of dollars monthly, comprise a greater percentage of your D&B PAYDEX score than your transactions with the carpet cleaner who comes out to steam your rugs annually for a few hundred dollars, for example.

It’s important to note that a Dun & Bradstreet PAYDEX score of 100 does not indicate that a business has made on time payments — in fact, it indicates that a business has consistently paid suppliers 30 days in advance. Here’s a breakdown of what your Dun and Bradstreet number means:

Paydex Score:

Explanation:

100

Payment comes 30 days sooner than terms

90

Payment comes 20 days sooner than terms

80

Payment comes on terms

70

Payment comes 15 days beyond terms

60

Payment comes 22 days beyond terms

50

Payment comes 30 days beyond terms

40

Payment comes 60 days beyond terms

30

Payment comes 90 days beyond terms

20

Payment comes 120 days beyond terms

1 – 19

Payment comes over 120 days beyond terms

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How is my PAYDEX score used?

PAYDEX is primarily used by vendors and suppliers to judge your business when determining what terms to extend on trade credit (e.g., net 30, net 60, etc.) This is important because having more time to pay your bills can help you better manage cash flow.

Lenders and creditors can also consider your PAYDEX score before extending lines of credit or loans to your business. You should aim to maintain a PAYDEX score of 75 or higher to ensure qualification for these types of financing.

How can I improve my D&B PAYDEX score?

Since your PAYDEX score is based entirely on the promptness of your payments to vendors and suppliers, the only way to improve it is to make sure you are paying on time. Remember: paying on time will only earn you a score of 80. For a perfect PAYDEX score of 100, you need to pay early.

You should also make sure you have at least three open tradelines to generate a PAYDEX score on your business. Having no PAYDEX score is just as bad as having a low one.

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I’m not sure what report you are looking at. Did you see this in your Nav account? If so feel free to reach out to our customer support team. Their contact info is in your Nav account. If you don’t have a Nav account you will need to reach out directly to Dun & Bradstreet to dispute it.

I’m not sure I fully understand your question John, but if I do you’re asking whether the fact that you don’t have a credit history with D&B could result in a low score. Is that correct? If so the answer is yes. Barring any negative information on your credit reports, your next step is likely to build positive business credit references that report.

good day, i am new to building credit, anyway i have a few accounts am working with. my main concern is how to understand my credit report. I saw on (A) on my DUNS ACCOUNT not sure if thats good are bad, also how to know how much is your paydex score.

Business credit reports don’t list the name of the creditor so you have to be a little bit of a detective and try to match other factors – such as a recent credit limit – to the information in your report. If you have a Nav account and continue to have trouble understanding it, feel free to reach out to our customer support team and they will do their best to help you understand it.

Also note that when you first start establishing business credit, it can take 30 – 60 days (or more) for accounts to start reporting.

If you’re looking for information on which companies will help you build business credit, you’ll find that in the BusinessLauncher section of your Nav account.

Makes no sense. I ordered from Quill. Rec’s notice order was rec’d. Sent cc payment 4 days later, and D&B marked as paid day of purchase. I called Quill and they told me to wait at least 14days before paying.
Quill reports all payments 1st business day monthly unless holiday.

D & B agent told me ” their ( D & B ) mistakes can not be corrected until new info from vender. Then she pushed VERY hard to get me to sign up for $8,000.00 Credit Congierge Program I told them no.

A viable follow up article would be to post National Stores that automatically report trade lines i.e. Retail Chains, Financial Insitutions.to assist startups in maximizing efficiency and opportunities.

Dunn and Bradstreet does not report accurately. My business has paid back over $1mm in debt, and pays creditors early as part of tax planning. Yet they report my business pays one day late. Unless you pay them money they jack around with their “credit score”. Which means those with A credit paid for the rating. How accurate can that be?